Rent of Land

||I, 3|Landlords’ right has its origin in robbery. (Say, t. 1, p. 136, footnote.) The landlords, like all other men, love to reap where they never sowed, and demand a rent even for the natural produce of the earth. (Adam Smith, op. cit., Vol. I, p. 44.)

“The rent of land, it may be thought, is frequently no more than a reasonable profit or interest for the stock laid out by the landlord upon its improvement. This, no doubt, may be partly the case upon some occasions.... The landlord demands” (1) “a rent even for unimproved land, and the supposed interest or profit upon the expense of improvement is generally an addition to this original rent.” (2) “Those improvements, besides, are not always made by the stock of the landlord, but sometimes by that of the tenant. When the lease comes to be renewed, however, the landlord commonly demands the same augmentation of rent as if they had been all made by his own.” (3) “He sometimes demands rent for what is altogether incapable of human improvement.” (Adam Smith, op. cit., Vol. I, p. 131)

Smith cites as an instance of the last case kelp,

“a species of seaweed, which, when burnt, yields an alkaline salt, useful for making glass, soap, etc. It grows in several parts of Great Britain, particularly in Scotland, upon such rocks only as lie within the high-water mark, which are twice every day covered with the sea, and of which the produce, therefore, was never augmented by human industry. The landlord, however, whose estate is bounded by a kelp shore of this kind, demands a rent for it as much as for his corn fields. The sea in the neighborhood of the Islands of Shetland is more than commonly abundant in fish, which make a great part of the subsistence of their inhabitants. ||II, 3| But in order to profit by the produce of the water they must have a habitation upon the neighboring land. The rent of the landlord is in proportion, not to what the farmer can make by the land, but to what he can make both by the land and by the water.” (Adam Smith, op. cit., Vol. I, p. 131)

“This rent may be considered as the produce of those powers of nature, the use of which the landlord lends to the farmer. It is greater or smaller according to the supposed extent of those powers, or in other words, according to the supposed natural or improved fertility of the land. It is the work of nature which remains after deducting or compensating everything which can be regarded as the work of man.” (Adam Smith, op. cit., Vol. I, pp. 324-25)

“The rent of land, therefore, considered as the price paid for the use of the land, is naturally a monopoly price. It is not at all proportioned to what the landlord may have laid out upon the improvement of the land, or to what he can afford to take; but to what the farmer can afford to give.” (Adam Smith, op. cit., p. 131)

Of the three original classes, that of the landlords is the one “whose revenue costs them neither labour nor care, but comes to them, as it were, of its own accord, and independent of any plan or project of their own.” (Adam Smith, op. cit., Vol. I, p. 230)

We have already learnt that the size of the rent depends on the degree of fertility of the land.

Another factor in its determination is situation.

“The rent of land not only varies with its fertility, whatever be its produce, but with its situation whatever be its fertility.” (Adam Smith, op. cit., Vol. I, p. 133.)

“The produce of land, mines, and fisheries, when their natural fertility is equal, is in proportion to the extent and proper ||III, 3| application of the capitals employed about them. When the capitals are equal and equally well applied, it is in proportion to their natural fertility.” (op. cit., Vol. I, p. 249.)

These propositions of Smith are important, because, given equal costs of production and capital of equal size, they reduce the rent of land to the greater or lesser fertility of the soil. Thereby showing clearly the perversion of concepts in political economy, which turns the fertility of the land into an attribute of the landlord.

Now, however, let us consider the rent of land as it is formed in real life.

The rent of land is established as a result of the struggle between tenant and landlord. We find that the hostile antagonism of interests, the struggle, the war is recognized throughout political economy as the basis of social organization.

Let us see now what the relations are between landlord and tenant.

“In adjusting the terms of the lease, the landlord endeavors to leave him no greater share of the produce than what is sufficient to keep up the stock from which he furnishes the seed, pays the labour, and purchases and maintains the cattle and other instruments of husbandry, together with the ordinary profits of farming stock in the neighbourhood. This is evidently the smallest share with which the tenant can content himself without being a loser, and the landlord seldom means to leave him any more. Whatever part of the produce, or, what is the same thing, whatever part of its price is over and above this share, he naturally endeavors to reserve to himself as the rent of his land, which is evidently the highest the tenant can afford to pay in the actual circumstances of the land. ||IV, 3| [...] This portion, however, may still be considered as the natural rent of land, or the rent for which it is naturally meant that land should for the most part be let.” (Adam Smith, op. cit., Vol. I, pp. 130-31.)

“The landlords,” says Say, “operate a certain kind of monopoly against the tenants. The demand for their commodity, site and soil, can go on expanding indefinitely; but there is only a given, limited amount of their commodity.... The bargain struck between landlord and tenant is always advantageous to the former in the greatest possible degree.... Besides the advantage he derives from the nature of the case, he derives a further advantage from his position, his larger fortune and greater credit and standing. But the first by itself suffices to enable him and him alone to profit from the favorable circumstances of the land. The opening of a canal, or a road; the increase of population and of the prosperity of a district, always raises the rent.... Indeed, the tenant himself may improve the ground at his own expense; but he only derives the profit from this capital for the duration of his lease, with the expiry of which it remains with the proprietor of the land; henceforth it is the latter who reaps the interest thereon, without having made the outlay, for there is now a proportionate increase in the rent.” (Say, t. II., pp. 142-43.)

“Rent, considered as the price paid for the use of land, is naturally the highest which the tenant can afford to pay in the actual circumstances of the land.” (Adam Smith, op. cit., Vol. I, p. 130)

“The rent of an estate above ground commonly amounts to what is supposed to be a third of the gross produce; and it is generally a rent certain and independent of the occasional variations ||V, 3| in the crop.” (Adam Smith, op. cit., Vol. I, p. 153.) This rent “is seldom less than a fourth ... of the whole produce.” (op. cit., Vol. I, p. 325.)

Rent cannot be paid on all commodities. For instance, in many districts no rent is paid for stones.

“Such parts only of the produce of land can commonly be brought to market of which the ordinary price is sufficient to replace the stock which must be employed in bringing them thither, together with its ordinary profits. If the ordinary price is more than this, the surplus part of it will naturally go to the rent of the land. If it is not more, though the commodity may be brought to market, it can afford no rent to the landlord. Whether the price is or is not more depends upon the demand.” (Adam Smith, op. cit., Vol. I, p. 132.)

“Rent, it is to be observed, therefore, enters into the composition of the price of commodities in a different way from wages and profit. High or low wages and profit are the causes of high or low price; high or low rent is the effect of it.” (Adam Smith, loc. cit., Vol. I, p. 132)

Food belongs to the products which always yield a rent.

“As men, like all other animals, naturally multiply in proportion to the means of their subsistence, food is always., more or less, in demand. It can always purchase or command a greater or smaller ||VI, 3| quantity of labour, and somebody can always be found who is willing to do something in order to obtain it. The quantity of labour, indeed, which it can purchase is not always equal to what it could maintain, if managed in the most economical manner, on account of the high wages which are sometimes given to labour. But it can always purchase such a quantity of labour as it can maintain, according to the rate at which the sort of labour is commonly maintained in the neighborhood.

“But land, in almost any situation, produces a greater quantity of food than what is sufficient to maintain all the labour necessary for bringing it to market in the most liberal way in which that labour is ever maintained. [...] The surplus, too, is always more than sufficient to replace the stock which employed that labour, together with its profits. Something, therefore, always remains for a rent to the landlord.” (Adam Smith, op. cit., Vol. I, pp. 132-33.)

“Food is in this manner not only the original source of rent, but every other part of the produce of land which afterwards affords rent derives that part of its value from the improvement of the powers of labour in producing food by means of the improvement and cultivation of land.” (Adam Smith, op. cit., Vol. I, p. 150.)

“Human food seems to be the only produce of land which always and necessarily affords some rent to the landlord.” (op. cit., Vol. I, p. 147.)

“Countries are populous not in proportion to the number of people whom their produce can clothe and lodge, but in proportion to that of those whom it can feed.” (Adam Smith, op. cit., Vol. I, p. 149.)|VI||

“After food, clothing and lodging are the two great wants of mankind.” They usually yield a rent, but not inevitably. (op. cit., Vol. I, p. 147.)

||VIII, 3|[15] Let us now see how the landlord exploits everything from which society benefits.

(2) We have already learnt from Say how the rent of land increases with railways, etc., with the improvement, safety, and multiplication of the means of communication.

(3) “Every improvement in the circumstances of the society tends either directly or indirectly to raise the real rent of land, to increase the real wealth of the landlord, his power of purchasing the labour, or the produce of the labour of other people.

“The extension of improvement and cultivation tends to raise it directly. The landlord’s share of the produce necessarily increases with the increase of the produce.

“That rise in the real price of those parts of the rude produce of land [...] the rise in the price of cattle, for example, tends too to raise the rent of land directly, and in a still greater proportion. The real value of the landlord’s share, his real command of the labour of other people, not only rises with the real value of the produce, but the proportion of his share to the whole produce rises with it. That produce, after the rise in its real price, requires no more labour to collect it than before. A smaller proportion of it will, therefore, be sufficient to replace, with the ordinary profit, the stock which employs that labour. A greater proportion of it must, consequently, belong to the landlord.” (Adam Smith, op. cit., Vol. I, pp. 228-29.)

||IX, 3|
The greater demand for raw produce, and therefore the rise in value, may in part result from the increase of population and from the increase of their needs. But every new invention, every new application in manufacture of a previously unused or little-used raw material, augments rent. Thus, for example, there was a tremendous rise in the rent of coal mines with the advent of the railways, steamships, etc.

Besides this advantage which the landlord derives from manufacture, discoveries, and labour, there is yet another, as we shall presently see.

(4) “All those improvements in the productive powers of labour, which tend directly to reduce the real price of manufactures, tend indirectly to raise the real rent of land. The landlord exchanges that part of his rude produce, which is over and above his own consumption, or what comes to the same thing, the price of that part of it, for manufactured produce. Whatever reduces the real price of the latter, raises that of the former. An equal quantity of the former becomes thereby equivalent to a greater quantity of the latter; and the landlord is enabled to purchase a greater quantity of the conveniences, ornaments, or luxuries, which he has occasion for.” (Adam Smith, op. cit., Vol. I, p. 229.)

But it is silly to conclude, as Smith does, that since the landlord exploits every benefit which comes to society ||X, 3| the interest of the landlord is always identical with that of society. (op. cit., Vol. I, p. 230.) In the economic system, under the rule of private property, the interest which an individual has in society is in precisely inverse proportion to the interest society has in him – just as the interest of the usurer in the spendthrift is by no means identical with the interest of the spendthrift.

We shall mention only in passing the landlord’s obsession with monopoly directed against the landed property of foreign countries, from which the Corn Laws [16], for instance, originate. Likewise, we shall here pass over medieval serfdom, the slavery in the colonies, and the miserable condition of the country folk, the day-labourers, in Great Britain. Let us confine ourselves to the propositions of political economy itself.

(1) The landlord being interested in the welfare of society means, according to the principles of political economy, that he is interested in the growth of its population and manufacture, in the expansion of its needs – in short, in the increase of wealth; and this increase of wealth is, as we have already seen, identical with the increase of poverty and slavery. The relation between increasing house rent and increasing poverty is an example of the landlord’s interest in society, for the ground rent, the interest obtained from the land on which the house stands, goes up with the rent of the house.

(2) According to the political economists themselves, the landlord’s interest is inimically opposed to the interest of the tenant farmer – and thus already to a significant section of society.

||XI, 3|(3) As the landlord can demand all the more rent from the tenant farmer the less wages the farmer pays, and as the farmer forces down wages all the lower the more rent the landlord demands, it follows that the interest of the landlord is just as hostile to that of the farm workers as is that of the manufacturers to their workers. He likewise forces down wages to the minimum.

(4) Since a real reduction in the price of manufactured products raises the rent of land, the landowner has a direct interest in lowering the wages of industrial workers, in competition amongst the capitalists, in over-production, in all the misery associated with industrial production.

(5) While, thus, the landlord’s interest, far from being identical with the interest of society, stands inimically opposed to the interest of tenant farmers, farm labourers, factory workers and capitalists, on the other hand, the interest of one landlord is not even identical with that of another, on account of the competition which we will now consider.

In general the relationship of large and small landed property is like that of big and small capital. But in addition, there are special circumstances which lead inevitably to the accumulation of large landed property and to the absorption of small property by it.

||XII, 3|(1) Nowhere does the relative number of workers and implements decrease more with increases in the size of the stock than in landed property. Likewise, the possibility of all-round exploitation, of economizing production costs, and of effective division of labour, increases nowhere more with the size of the stock than in landed property. However small a field may be, it requires for its working a certain irreducible minimum of implements (plough, saw, etc.), whilst the size of a piece of landed property can be reduced far below this minimum.

(2) Big landed property accumulates to itself the interest on the capital which the tenant farmer has employed to improve the land. Small landed property has to employ its own capital, and therefore does not get this profit at all.

(3) While every social improvement benefits the big estate, it harms small property, because it increases its need for ready cash.

(4) Two important laws concerning this competition remain to be considered:

(α) The rent of the cultivated land, of which the produce is human food, regulates the rent of the greater part of other cultivated land. (Adam Smith, op. cit., Vol. I, p. 144.)

Ultimately, only the big estate can produce such food as cattle, etc. Therefore it regulates the rent of other land and can force it down to a minimum.

The small landed proprietor working on his own land stands then to the big landowner in the same relation as an artisan possessing his own tool to the factory owner. Small property in land has become a mere instrument of labour. ||XVI, 1|[17] Rent entirely disappears for the small proprietor; there remains to him at the most the interest on his capital, and his wages. For rent can be driven down by competition till it is nothing more than the interest on capital not invested by the proprietor.

(β) In addition, we have already learnt that with equal fertility and equally efficient exploitation of lands, mines and fisheries, the produce is proportionate to the size of the capital. Hence the victory of the big landowner. Similarly, where equal capitals are employed the product is proportionate to the fertility. Hence, where capitals are equal, victory goes to the proprietor of the more fertile soil.

(γ) “A mine of any kind may be said to be either fertile or barren, according as the quantity of mineral which can be brought from it by a certain quantity of labour is greater or less than what can be brought by an equal quantity from the greater part of other mines of the same kind.” (Adam Smith, op. cit., Vol. I, p. 151.)

“The most fertile coal-mine, too, regulates the price of coal at all the other mines in its neighborhood. Both the proprietor and the undertaker of the work find, the one that he can get a greater rent, the other that he can get a greater profit, by somewhat underselling all their neighbors. Their neighbors are soon obliged to sell at the same price, though they cannot so well afford it, and though it always diminishes, and sometimes takes away altogether both their rent and their profit. Some works are abandoned altogether; others can afford no rent, and can be wrought only by the proprietor.” (Adam Smith, op. cit., Vol. I, pp. 152-53.)

“After the discovery of the mines of Peru, the silver mines of Europe were, the greater part of them, abandoned.... This was the case, too, with the mines of Cuba and St. Domingo, and even with the ancient mines of Peru, after the discovery of those of Potosi.” (op. cit., Vol. I, p. 154.)

What Smith here says of mines applies more or less to landed property generally:

(δ) “The ordinary market price of land, it is to be observed, depends everywhere upon the ordinary market rate of interest.... If the rent of land should fall short of the interest of money by a greater difference, nobody would buy land, which would soon reduce its ordinary price. On the contrary, if the advantages should much more than compensate the difference, everybody would buy land, which again would soon raise its ordinary price.” (op. cit., Vol. I, p. 320.)

From this relation of rent of land to interest on money it follows that rent must fall more and more, so that eventually only the wealthiest people can live on rent. Hence the ever greater competition between landowners who do not lease their land to tenants. Ruin of some of these; further accumulation of large landed property.

||XVII, 2|
This competition has the further consequence that a large part of landed property falls into the hands of the capitalists and that capitalists thus become simultaneously landowners, just as the smaller landowners are on the whole already nothing more than capitalists. Similarly, a section of large landowners become at the same time industrialists.

The final consequence is thus the abolition of the distinction between capitalist and landowner, so that there remain altogether only two classes of the population – the working class and the class of capitalists. This huckstering with landed property, the transformation of landed property into a commodity, constitutes the final overthrow of the old and the final establishment of the money aristocracy.

(1) We will not join in the sentimental tears wept over this by romanticism. Romanticism always confuses the shamefulness of huckstering the land with the perfectly rational consequence, inevitable and desirable within the realm of private property, of the huckstering of private property in land. In the first place, feudal landed property is already by its very nature huckstered land – the earth which is estranged from man and hence confronts him in the shape of a few great lords.

The domination of the land as an alien power over men is already inherent in feudal landed property. The serf is the adjunct of the land. Likewise, the lord of an entailed estate, the first-born son, belongs to the land. It inherits him. Indeed, the dominion of private property begins with property in land – that is its basis. But in feudal landed property the lord at least appears as the king of the estate. Similarly, there still exists the semblance of a more intimate connection between the proprietor and the land than that of mere material wealth. The estate is individualized with its lord: it has his rank, is baronial or ducal with him, has his privileges, his jurisdiction, his political position, etc. It appears as the inorganic body of its lord. Hence the proverb nulle terre sans maître[There is no land without its master. - Ed], which expresses the fusion of nobility and landed property. Similarly, the rule of landed property does not appear directly as the rule of mere capital. For those belonging to it, the estate is more like their fatherland. It is a constricted sort of nationality.

||XVIII, 2|
In the same way, feudal landed property gives its name to its lord, as does a kingdom to its king. His family history, the history of his house, etc. – all this individualizes the estate for him and makes it literally his house, personifies it. Similarly those working on the estate have not the position of day-labourers; but they are in part themselves his property, as are serfs; and in part they are bound to him by ties of respect, allegiance, and duty. His relation to them is therefore directly political, and has likewise a human, intimate side. Customs, character, etc., vary from one estate to another and seem to be one with the land to which they belong; whereas later, it is only his purse and not his character, his individuality, which connects a man with an estate. Finally, the feudal lord does not try to extract the utmost advantage from his land. Rather, he consumes what is there and calmly leaves the worry of producing to the serfs and the tenants. Such is nobility’s relationship to landed property, which casts a romantic glory on its lords.

It is necessary that this appearance be abolished – that landed property, the root of private property, be dragged completely into the movement of private property and that it become a commodity; that the rule of the proprietor appear as the undisguised rule of private property, of capital, freed of all political tincture; that the relationship between proprietor and worker be reduced to the economic relationship of exploiter and exploited; that all [...] personal relationship between the proprietor and his property cease, property becoming merely objective, material wealth; that the marriage of convenience should take the place of the marriage of honor with the land; and that the land should likewise sink to the status of a commercial value, like man. It is essential that that which is the root of landed property – filthy self-interest – make its appearance, too, in its cynical form. It is essential that the immovable monopoly turn into the mobile and restless monopoly, into competition; and that the idle enjoyment of the products of other people’s blood and sweat turn into a bustling commerce in the same commodity. Lastly, it is essential that in this competition landed property, in the form of capital, manifest its dominion over both the working class and the proprietors themselves who are either being ruined or raised by the laws governing the movement of capital. The medieval proverb nulle terre sans seigneur[There is no land without its lord. - Ed] is thereby replaced by that other proverb, l’argent n’a pas de maître, [Money knows no master. - Ed] wherein is expressed the complete domination of dead matter over man.

||XIX, 2|(2) Concerning the argument of division or non-division of landed property, the following is to be observed.

The division of landed property negates the large-scale monopoly of property in land – abolishes it; but only by generalizing this monopoly. It does not abolish the source of monopoly, private property. It attacks the existing form, but not the essence, of monopoly. The consequence is that it falls victim to the laws of private property. For the division of landed property corresponds to the movement of competition in the sphere of industry. In addition to the economic disadvantages of such a dividing-up of the instruments of labour, and the dispersal of labour (to be clearly distinguished from the division of labour: in separated labour the work is not shared out amongst many, but each carries on the same work by himself, it is a multiplication of the same work), this division [of land], like that competition [in industry], necessarily turns again into accumulation.

Therefore, where the division of landed property takes place, there remains nothing for it but to return to monopoly in a still more malignant form, or to negate, to abolish the division of landed property itself. To do that, however, is not to return to feudal ownership, but to abolish private property in the soil altogether. The first abolition of monopoly is always its generalization, the broadening of its existence. The abolition of monopoly, once it has come to exist in its utmost breadth and inclusiveness, is its total annihilation. Association, applied to land, shares the economic advantage of large-scale landed property, and first brings to realization the original tendency inherent in [land] division, namely, equality. In the same way association also re-establishes, now on a rational basis, no longer mediated by serfdom, overlordship and the silly mysticism of property, the intimate ties of man with the earth, since the earth ceases to be an object of huckstering, and through free labour and free enjoyment becomes once more a true personal property of man. A great advantage of the division of landed property is that the masses, which can no longer resign themselves to servitude, perish through property in a different way than in industry.

As for large landed property, its defenders have always, sophistically, identified the economic advantages offered by large-scale agriculture with large-scale landed property, as if it were not precisely as a result of the abolition of property that this advantage, for one thing, would receive its ||XX, 2| greatest possible extension, and, for another, only then would be of social benefit. In the same way, they have attacked the huckstering spirit of small landed property, as if large landed property did not contain huckstering latent within it, even in its feudal form – not to speak of the modern English form, which combines the landlord’s feudalism with the tenant farmer’s huckstering and industry.

Just as large landed property can return the reproach of monopoly leveled against it by partitioned land, since partitioned land is also based on the monopoly of private property, so can partitioned landed property likewise return to large landed property the reproach of partition, since partition also prevails there, though in a rigid and frozen form. Indeed, private property rests altogether on partitioning. Moreover, just as division of the land leads back to large landed property as a form of capital wealth, so must feudal landed property necessarily lead to partitioning or at least fall into the hands of the capitalists, turn and twist as it may.

For large landed property, as in England, drives the overwhelming majority of the population into the arms of industry and reduces its own workers to utter wretchedness. Thus, it engenders and enlarges the power of its enemy, capital, industry, by throwing poor people and an entire activity of the country on to the other side. It makes the majority of the people of the country industrial and thus opponents of large landed property. Where industry has attained to great power, as in England at the present time, it progressively forces from large landed property its monopoly against foreign countries and throws it into competition with landed property abroad. For under the sway of industry landed property could keep its feudal grandeur secure only by means of monopolies against foreign countries, thereby protecting itself against the general laws of trade, which are incompatible with its feudal character. Once thrown into competition, landed property obeys the laws of competition, like every other commodity subjected to competition. It begins thus to fluctuate, to decrease and to increase, to fly from one hand to another; and no law can keep it any longer in a few predestined hands. ||XXI, 2| The immediate consequence is the splitting up of the land amongst many hands, and in any case subjection to the power of industrial capitals.

Finally, large landed property which has been forcibly preserved in this way and which has begotten by its side a tremendous industry leads to crisis even more quickly than the partitioning of land, in comparison with which the power of industry remains constantly of second rank.

Large landed property, as we see in England, has already cast off its feudal character and adopted an industrial character insofar as it is aiming to make as much money as possible. To the owner it yields the utmost possible rent, to the tenant farmer the utmost possible profit on his capital. The workers on the land, in consequence, have already been reduced to the minimum, and the class of tenant farmers already represents within landed property the power of industry and capital. As a result of foreign competition, rent in most cases can no longer form an independent income. A large number of landowners are forced to displace tenant farmers, some of whom in this way [...] sink into the proletariat. On the other hand, many tenant farmers will take over landed property; for the big proprietors, who with their comfortable incomes have mostly given themselves over to extravagance and for the most part are not competent to conduct large-scale agriculture, often possess neither the capital nor the ability for the exploitation of the land. Hence a section of this class, too, is completely ruined. Eventually wages, which have already been reduced to a minimum, must be reduced yet further, to meet the new competition. This then necessarily leads to revolution.

Landed property had to develop in each of these two ways so as to experience in both its necessary downfall, just as industry both in the form of monopoly and in that of competition had to ruin itself so as to learn to believe in man. |XXI||